Apple purchased Lala.com back in December 2009. So far, the service has been running, unchanged. However, I predict it will shut down in the near future, and their technology will somehow integrate with iTunes. When this happens, I know people are going to scream bloody murder. Everyone loves hating on Apple.However, Lala’s business model was totally flawed and could not succeed on its own. They would “sell” you a song for 10 cents, and bet that you listened to it infrequently enough that they made money. However, people want to own their music, put it on their iPods, and listen to it over and over.
So while it will seem like Apple is shutting down a well loved service, they are actually stopping it from bleeding money, and will use it to add great new features to their ecosystem.
People think they are entitled to free music. But history has shown that no one can give you media for free. Illegal sites have tried and failed (Napster, allofmp3). And even ad based services are switching to pay (Hulu). Lala’s model was interesting, a nice experiment, but it was bound to fail.
Background: Lala is a great service that lets you listen to music on the web for free. But there’s a catch, you can only listen to every song one time.After that you have a choice: you can pay $0.10 to play the song on the web only (no iPods). Lala pays the record labels a fraction of a penny every time you play the song, and they hope to come out ahead (it’s a gamble). Or you pay them $0.89 to own and download the song, in which case you might as well just buy it from iTunes.
I think Apple will use Lala to build a web based iTunes store with free samples. And then sell you the full song to sync with your iDevice. This is the only model that will work.